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National Bank Holdings Corporation Announces First Quarter 2015 Financial Results


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National Bank Holdings Corporation

Apr 23, 2015, 04:05 ET

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GREENWOOD VILLAGE, Colo., April 23, 2015 /PRNewswire/ -- National Bank Holdings Corporation (NYSE: NBHC) reported net income of $1.2 million, or $0.03 per diluted share, for the first quarter of 2015, compared to net income of $2.3 million, or $0.06 per diluted share, for the fourth quarter of 2014 and $1.4 million, or $0.03 per diluted share, for the first quarter of 2014.

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National Bank Holdings Corporation Logo
National Bank Holdings Corporation Logo

In announcing these results, Chief Executive Officer Tim Laney said, "We delivered on another quarter of solid loan growth, driven by $204 million in new loan originations and excellent credit quality.  We had a nice uptick in commercial activity as we have remained focused on deepening our relationships with our small to mid-sized clients and expanding our deposit base within our markets.  We continued to have success growing our average client demand deposits, which have grown 9.9% since the first quarter of last year, providing continued growth to our low-cost funding sources."

Mr. Laney added, "We remained active in repurchasing our shares during the first quarter and repurchased another 2.1 million shares, or 5.4% of our outstanding shares.  Since early 2013, we have repurchased 29.8% of our shares outstanding, at a weighted average price of $19.48.  In February, we announced another $50 million share repurchase authorization, so that we can continue the use of share repurchases as a means to opportunistically manage our shareholders' capital in the current environment."

Brian Lilly, Chief Financial Officer, added, "We continue to evaluate the progress of building our company by analyzing the financial results that are expected to emerge over time.  We do this by excluding the impact of the non-cash FDIC indemnification asset amortization, FDIC loss-share income/expense, the large expense/income related to the workout of acquired OREO and problem loans, the impacts of the change in the warrant liability, and conversion related expenses, which can be seen in our non-GAAP reconciliation starting on page 14.  These items negatively impacted the first quarter by a net $0.14 per diluted share.  The net impact of these items may fluctuate on a quarterly basis, but is expected to decrease over time in connection with the expiration of the FDIC loss-sharing agreements over the next couple of years and the decreasing problem asset workout expenses.  The additional $0.14 per diluted share would have resulted in an adjusted net earnings per diluted share of $0.17 for the first quarter of 2015 compared to $0.15 for the first quarter of 2014.  The adjusted return on average tangible assets was 0.60% during the first quarter.  We feel that this analysis provides better clarity to the emerging profitability and the progress toward reaching our goal of 1% return on average tangible assets."

First Quarter 2015 Highlights
(All comparisons refer to the fourth quarter of 2014, except as noted)

  • Grew the strategic loan portfolio by $77.1 million, or 15.9% annualized, driven by $203.7 million in originations.
  • Credit quality remained strong, as annualized net charge-offs in the non 310-30 portfolio were only 0.04% of average non 310-30 loans.
  • Successfully exited $23.2 million, or 46.7% annualized, of the remaining non-strategic loan portfolio.
  • Added a net $10.0 million to accretable yield for the acquired loans accounted for under ASC 310-30.
  • Average total deposits and client repurchase agreements grew $123.1 million, while higher-cost average time deposits declined $35.9 million.
  • Net interest income totaled $39.5 million, a $3.1 million decrease from the prior quarter. The quarterly decrease was primarily driven by the $1.7 million in accelerated loan accretion recognized during the prior quarter, lower balances of high-yielding purchased loans and two fewer days in the quarter.
  • FDIC loss-share related non-interest income totaled a negative $8.5 million, including $7.7 million of non-cash amortization of the FDIC indemnification asset.
  • Operating expenses decreased $1.4 million, or 15.2% annualized, from the prior quarter, while lower OREO gains drove a $3.6 million increase in total non-interest expense.
  • Repurchased 2.1 million shares during the first quarter, or 5.4% of outstanding shares. Since early 2013, 15.6 million shares have been repurchased, or 29.8% of then outstanding shares, at a weighted average price of $19.48.
  • At March 31, 2015, tangible common book value per share was $18.86 before consideration of the excess accretable yield value of $0.94 per share.

First Quarter 2015 Results
(All comparisons refer to the fourth quarter of 2014, except as noted)

Net Interest Income
Net interest income totaled $39.5 million, a $3.1 million decrease from the prior quarter, largely due to $1.7 million in accelerated loan accretion recognized during the fourth quarter of 2014, lower levels of higher-yielding purchased loans and two fewer days in the first quarter. Average interest earning assets increased $114.8 million, or 2.6%, to $4.5 billion from the prior quarter, due to higher levels of short-term investments that were driven by an increase in client repurchase agreements.  The net interest margin narrowed to 3.59% during the first quarter of  2015 from 3.87% during the previous quarter (fully taxable equivalent), representing a narrowing of 28 basis points.  The $1.7 million of accelerated loan accretion benefited the fourth quarter by 15 basis points.  Additionally, the impact of the higher level of lower-yielding short-term investments that resulted from the additional client repurchase agreements narrowed the first quarter net interest margin by 10 basis points.

Loans
Strategic loans totaled $2.0 billion at March 31, 2015 and grew $77.1 million during the quarter, or 15.9% annualized.  Included in strategic loans outstanding are $1.7 billion in originated balances, which increased $100.6 million, or 24.8% annualized, over the prior quarter.  Loan originations totaled $203.7 million and increased $21.5 million, or 11.8%, from the prior quarter. Total loans ended the quarter at $2.2 billion, increasing $53.9 million during the quarter, or 10.1% annualized.  Consistent with the strategy of exiting the non-strategic loan portfolio, balances of non-strategic relationships totaled $178.5 million at March 31, 2015, decreasing $23.2 million during the quarter, or 46.7% annualized. Strategic loans include all originated loans in addition to those acquired loans inside our operating markets that meet our credit risk profile. Identification as strategic for acquired loans was made at the time of acquisition.  Criteria utilized in the designation of an acquired loan as "strategic" include (a) geography, (b) total relationship with borrower and (c) credit metrics commensurate with our underwriting standards.

Energy sector loan balances totaled $149.6 million at March 31, 2015, representing 6.8% of total loans and 3.3% of earning assets and decreased from $161.8 million at December 31, 2014 as clients raised capital, increased cash positions and moderated borrowings in response to continued depressed oil and natural gas prices.

Asset Quality and Provision for Loan Losses
Purchased loans accounted for under 310-30 totaled $249.9 million at March 31, 2015 and decreased $29.8 million during the first quarter, an annualized decrease of 43.2%, reflecting workout efforts on these purchased loans.  The quarterly fair value re-measurement on the 310-30 loans resulted in a favorable net transfer of $10.0 million from non-accretable difference to accretable yield, which will be recognized over the lives of the 310-30 pools.  This increased the life-to-date economic benefit of the accretable yield transfers net of impairments on 310-30 loans to $196.5 million.

Non 310-30 loans totaled $2.0 billion and represented 88.7% of total loans at March 31, 2015.  These loans are comprised of originated loans of $1.7 billion and acquired loans not accounted for under 310-30 of $220.2 million.  Net charge-offs within the non 310-30 portfolio remained low at just 0.04% annualized, which reflects the prudent underwriting and well-selected clients within this portfolio.  Non-performing non 310-30 loans (comprised of non-accrual loans and non-accrual TDRs) represented 0.58% of total non 310-30 loans, compared to 0.57% at December 31, 2014.  A provision for loan losses on the non 310-30 loans of $1.4 million was recorded during the first quarter of 2015, which was $0.1 million lower than the prior quarter and brought the allowance for loan losses on non 310-30 loans to 0.92% before consideration of $7.0 million of remaining purchase accounting discounts.

OREO ended the quarter at $23.4 million, decreasing $5.7 million during the quarter.  Gains on sales of OREO were $1.5 million during the first quarter (of which $0.7 million of the gains were covered by loss-sharing agreements with the FDIC) compared to $10.4 million in the previous quarter (of which $8.9 million were covered by loss-sharing agreements with the FDIC).  Of the $23.4 million of OREO at March 31, 2015, $15.9 million, or 67.8%, were covered by loss-sharing agreements with the FDIC.

Deposits
Transaction deposits (defined as total deposits less time deposits) and client repurchase agreements averaged $2.7 billion during the first quarter, increasing $159.0 million, or 6.3%.  Total deposits and client repurchase agreements averaged $4.0 billion during the first quarter, increasing $123.1 million during the quarter, or 3.2%, and was driven by a $40.5 million increase in average interest bearing demand, savings and money market deposits, coupled with a $113.6 million increase in client repurchase agreements.  Higher-cost time deposits declined $35.9 million, or 10.6% annualized.  Additionally, the average cost of total deposits declined one basis point from the prior quarter to 0.36% during the first quarter.  The balance sheet continues to be strongly funded by client deposits and client repurchase agreements and at March 31, 2015, these client fundings comprised 97.4% of total liabilities.

Non-Interest Income
Banking related non-interest income (excludes FDIC-related non-interest income, gain on previously charged-off acquired loans and OREO related income) totaled $7.4 million during the first quarter of 2015 and decreased $0.6 million, compared to the prior quarter.  The decrease was primarily attributable to a $0.5 million decrease in service charges.

FDIC loss-share related non-interest income totaled a negative $8.5 million for the first quarter compared to a negative $14.2 million during the prior quarter, improving $5.7 million.  The improvement was primarily due to a $5.5 million decrease in other FDIC loss-sharing income (expense) related to the sharing of gains on sales of several covered OREO properties in the fourth quarter, which was a particularly strong quarter of covered OREO resolution.  As of March 31, 2015, the FDIC indemnification asset was $27.9 million. The FDIC indemnification asset amortization is expected to be between $14.0 million and $21.0 million for the remainder of 2015.  The benefit of the increased client cash flows that contributes to the amortization of the FDIC indemnification asset is captured in the 310-30 accretable yield over the remaining life of the loan pools as most of the FDIC covered assets are accounted for in the 310-30 loan pools.

"We continue to have success in our workout efforts regarding our purchased troubled loan portfolio and related OREO assets," said Brian Lilly.  "While this means higher returns on the covered loans, it also means we have to share the gains with the FDIC and as a result, we have lower expected reimbursements from the FDIC.  This translates into additional non-cash write-downs of the FDIC indemnification asset receivable.  In the first quarter, we wrote-down this receivable $7.7 million, or $0.12 per diluted share.  While we expect that the FDIC loss-share related non-interest income will continue to fluctuate and be a reflection of our workout efforts, our current expectation is that the non-cash write-down of the FDIC indemnification asset receivable will be between $0.24 and $0.35 per diluted share for the remainder of 2015."

Non-Interest Expense
Total non-interest expense was $36.7 million during the first quarter of 2015, increasing $3.6 million from the previous quarter, largely due to the significant OREO gains recorded during the fourth quarter.  Operating expenses, which exclude OREO expenses, problem loan expense, the impact from the change in the warrant liability and conversion-related expenses, totaled $36.4 million and decreased $1.4 million, driven by a $0.5 million decrease in salaries and benefits.

OREO and problem loan expenses totaled $0.4 million and increased $8.9 million from the prior quarter.  The increase was due to the higher levels of OREO gains realized during the fourth quarter.  OREO and problem loan expenses are expected to continue to fluctuate quarterly as the acquired problem asset portfolio is resolved.

An income tax benefit of $0.4 million was recorded during the first quarter.  The tax benefit was a result of tax-exempt income exceeding taxable income for the quarter.

Capital
Capital ratios continue to be strong and well in excess of federal bank regulatory agency "well capitalized" thresholds.  Shareholders' equity totaled $762.7 million at March 31, 2015 and decreased $31.9 million from the prior quarter.  The decrease was due to the repurchase of 2.1 million shares and was partially offset by a $6.2 million increase in accumulated other comprehensive income, net of tax, which was driven by the fair market value fluctuations of the available-for-sale investment securities portfolio.  The shares repurchased represented a 5.4% reduction in shares outstanding during the quarter, which brings the cumulative shares repurchased since early 2013 to 29.8% of the shares then outstanding.

Tangible common book value per share at March 31, 2015 was $18.86, compared to $18.63 at December 31, 2014, and the tangible common equity to tangible assets ratio decreased 1.15% to 14.10% at March 31, 2015.

A common convention in the industry is to add the value of the accretable yield to the tangible book value per share.  The value of the March 31, 2015 accretable yield balance on the 310-30 loans of $110.8 million would add $1.84 after-tax to the tangible book value per share.  A more conservative methodology, that management uses, values the excess yield and then considers the timing of the accreted interest income recognition.  Under this more conservative methodology, we first net the accretable yield on 310-30 loans and the amortization of the FDIC indemnification asset and then calculate the excess above a 4.0% yield (an approximate yield on new loan originations), and finally discount the amounts at 5%.  The result would add $0.94 after-tax to our tangible book value per share as of March 31, 2015.

Year-Over-Year Review
(All comparisons refer to the first quarter of 2014)

Net income for the first quarter of 2015 was $1.2 million, or $0.03 per diluted share, compared to net income of $1.4 million for the first quarter of 2014, or $0.03 per diluted share.  Net interest income totaled $39.5 million during the first quarter of 2015 and decreased $3.9 million, or 8.9%, from the first quarter of 2014, largely due to lower levels of  higher-yielding purchased loans.  Average interest earning assets remained relatively stable from the same quarter of the prior year, as increases in the originated loan portfolio and cash offset a reduction in the investment portfolio and non-strategic purchased loans.  The continued resolution of the higher-yielding acquired non-strategic loan portfolio led to a 35 basis point narrowing of the net interest margin to 3.59% from 3.94% (fully taxable equivalent).  The elevated level of lower-yielding short-term investments that resulted from the increased client repurchase agreements negatively impacted the first quarter 2015 margin by 10 basis points.

Loan balances as of March 31, 2015 totaled $2.2 billion and increased $254.7 million, or 13.0%, since March 31, 2014.  Strategic loans increased $397.4 million since March 31, 2014, a 24.2% increase, on the strength of $856.0 million in loan originations between the two periods.  The strong loan originations were the result of continued market penetration and the success of specialty lending groups.  Non-strategic loans declined $142.7 million from a year ago, a 44.4% decrease, as a result of the continued workout progress on exiting acquired problem loans.

Average transaction deposits and client repurchase agreements totaled $2.7 billion during the first quarter of 2015 and increased $200.7 million from the same period in 2014, or 8.1%, and were led by a $133.1 million increase in client repurchase agreements and a $66.2 million increase in average demand deposits as a result of our strategic focus on relationship banking.  Total deposits and client repurchase agreements averaged $4.0 billion during the first quarter of 2015, increasing $76.5 million, or 1.9%, from the first quarter of the prior year.  The increase was primarily due to the aforementioned increases in client repurchase agreements coupled with the $66.2 million, or 9.9%, increase in demand deposits, and was somewhat offset by a $124.2 million, or 8.5%, decline in average time deposits.  The mix of transaction deposits to total deposits improved to 65.4% at March 31, 2015 from 62.7% at March 31, 2014.  Additionally, the average cost of total deposits declined one basis point to 0.36% in the first quarter of 2015 from 0.37% during the same period of 2014.

Provision for loan loss expense was $1.5 million during the first quarter of 2015, compared to $1.8 million during the first quarter of 2014, a decrease of $0.3 million.  The decrease in provision was primarily due to improved credit quality as non 310-30 net charge-offs decreased to only 0.04% during the first quarter of 2015 compared to 0.09% during the same period of 2014.

Non-interest income was a negative $0.5 million during the first quarter of 2015 compared to a negative $0.4 million during the same period a year ago, a decrease of $0.1 million.  Banking related non-interest income of $7.4 million during the first quarter of 2015 was up $0.5 million compared to the same period in the prior year as a result of increases in bank card fees, gain on sale of mortgages and bank owned life insurance income and were somewhat offset by a decrease in service charges.  FDIC loss-share related income was relatively stable compared to the first quarter of the prior year.

Non-interest expense totaled $36.7 million in the first quarter of 2015 compared to $39.0 million during 2014, a decrease of $2.3 million, or 5.9%.  Operating expenses of $36.4 million during the first quarter of 2015 decreased $1.2 million from the same quarter of 2014.  The 3.3% year-over-year decrease in operating expenses was primarily due to lower salaries and benefits of $0.7 million as a result of a continued focus on operational efficiencies.  OREO and problem loan expenses declined $1.9 million and were driven by $0.9 million higher net gains on OREO sales coupled with $1.2 million in lower OREO expenses.  The benefit from the change in the fair value of the warrant liability was $0.5 million less during the first quarter of 2015 than the same quarter of the prior year.

Conference Call
Management will host a conference call to review the results at 11:00 a.m. Eastern Time on Friday, April 24, 2015.  Interested parties may listen to this call by dialing (877) 272-6762 (United States)/(615) 800-6832 (International) using the Conference ID of 16946906 and asking for the National Bank Holdings Corporation First Quarter Earnings conference call.  A telephonic replay of the call will be available beginning approximately two hours after the call's completion through May 8, 2015, by dialing (855) 859-2056 (United States)/(404) 537-3406 (International) using the Conference ID of 16946906.  The earnings release will also be available on the Company's website at www.nationalbankholdings.com by visiting the investor relations area.

About Non-GAAP Financial Measures
Certain of the financial measures and ratios we present, including "tangible assets," "return on average tangible assets," "return on average tangible common equity," "tangible common book value," "tangible common book value per share," "tangible common equity," "tangible common equity to tangible assets," "fully taxable equivalent" metrics, "adjusted net income," "adjusted basic earnings per share," "adjusted diluted earnings per share," and "adjusted return on average tangible assets," are supplemental measures that are not required by, or are not presented in accordance with, U.S. generally accepted accounting principles (GAAP).  We refer to these financial measures and ratios as "non-GAAP financial measures." We consider the use of select non-GAAP financial measures and ratios to be useful for financial and operational decision making and useful in evaluating period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain expenditures or assets that we believe are not indicative of our primary business operating results or by presenting certain metrics on a fully taxable equivalent basis. We believe that management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, analyzing and comparing past, present and future periods.

These non-GAAP financial measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. The non-GAAP financial measures we present may differ from non-GAAP financial measures used by our peers or other companies. In particular, the items that we exclude in our adjustments are not necessarily consistent with the items that our peers may exclude from their results of operations and key financial measures and therefore may limit the comparability of similarly named financial measures and ratios. We compensate for these limitations by providing the equivalent GAAP measures whenever we present the non-GAAP financial measures and by including a reconciliation of the impact of the components adjusted for in the non-GAAP financial measure so that both measures and the individual components may be considered when analyzing our performance.

A reconciliation of non-GAAP financial measures to the comparable GAAP financial measures is included at the end of the financial statement tables.

About National Bank Holdings Corporation
National Bank Holdings Corporation is a bank holding company created to build a leading community bank franchise delivering high quality customer service and committed to shareholder results. National Bank Holdings Corporation operates a network of 97 banking centers located in Colorado, the greater Kansas City region and Texas. Through the Company's subsidiary, NBH Bank, N.A., it operates under the following brand names: Bank Midwest in Kansas and Missouri, Community Banks of Colorado in Colorado and Hillcrest Bank in Texas. Additional information about National Bank Holdings Corporation can be found at www.nationalbankholdings.com.

Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements contain words such as "anticipate," "believe," "can," "would," "should," "could," "may," "predict," "seek," "potential," "will," "estimate," "target," "plan," "project," "continuing," "ongoing," "expect," "intend" or similar expressions that relate to the Company's strategy, plans or intentions. Forward-looking statements involve certain important risks, uncertainties and other factors, any of which could cause actual results to differ materially from those in such statements. Such factors include, without limitation, the "Risk Factors" referenced in our most recent Form 10-K filed with the Securities and Exchange Commission (SEC), other risks and uncertainties listed from time to time in our reports and documents filed with the SEC, and the following additional factors: ability to execute our business strategy; business and economic conditions; economic, market, operational, liquidity, credit and interest rate risks associated with the Company's business; effects of any changes in trade, monetary and fiscal policies and laws; changes imposed by regulatory agencies to increase capital standards; effects of inflation, as well as, interest rate, securities market and monetary supply fluctuations; changes in consumer spending, borrowings and savings habits; the Company's ability to identify potential candidates for, consummate, integrate and realize operating efficiencies from, acquisitions; the Company's ability to successfully convert core operating systems, at the estimated cost, without significant business interruption and to realize the anticipated benefits; the Company's ability to achieve organic loan and deposit growth and the composition of such growth; changes in sources and uses of funds; increased competition in the financial services industry; the effect of changes in accounting policies and practices; the share price of the Company's stock; the Company's ability to realize deferred tax assets or the need for a valuation allowance; continued consolidation in the financial services industry; ability to maintain or increase market share and control expenses; costs and effects of changes in laws and regulations and of other legal and regulatory developments; technological changes; the timely development and acceptance of new products and services; the Company's continued ability to attract and maintain qualified personnel; ability to implement and/or improve operational management and other internal risk controls and processes and reporting system and procedures; regulatory limitations on dividends from the Company's bank subsidiary; changes in estimates of future loan reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; widespread natural and other disasters, dislocations, political instability, acts of war or terrorist activities, cyberattacks or international hostilities; impact of reputational risk; and success at managing the risks involved in the foregoing items. The Company can give no assurance that any goal or plan or expectation set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements. The forward-looking statements are made as of the date of this press release, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by applicable law.

NATIONAL BANK HOLDINGS CORPORATION





FINANCIAL SUMMARY






Consolidated Statements of Operations (Unaudited)





(Dollars in thousands, except share and per share data)












For the three months ended


March 31,


December 31,


March 31,


2015


2014


2014

Total interest and dividend income

$

43,087



$

46,280



$

46,885


Total interest expense

3,608



3,696



3,538


Net interest income before provision for loan losses

39,479



42,584



43,347


Provision for loan losses on 310-30 loans

50



(185)



(54)


Provision for loan losses on non 310-30 loans

1,403



1,450



1,823


Net interest income after provision for loan losses

38,026



41,319



41,578


Non-interest income:






FDIC indemnification asset amortization

(7,670)



(7,922)



(7,608)


Other FDIC loss-sharing expense

(810)



(6,313)



(957)


Service charges

3,327



3,872



3,540


Bank card fees

2,550



2,575



2,374


Gain on sale of mortgages, net

400



326



208


Other non-interest income

1,166



1,253



825


Gain on previously charged-off acquired loans

58



62



296


OREO related write-ups and other income

500



1,030



968


Total non-interest income (expense)

(479)



(5,117)



(354)


Non-interest expense:






Salaries and benefits

20,077



20,574



20,774


Occupancy and equipment

6,089



6,263



6,474


Professional fees

1,120



1,077



638


Other non-interest expense

8,111



8,539



8,376


Gain from the change in fair value of warrant liability

(390)



(219)



(898)


Intangible asset amortization

1,336



1,336



1,336


Other real estate owned (income) expenses

(418)



(8,979)



1,633


Problem loan expenses

799



448



685


Contract termination expenses

—



4,110



—


  Total non-interest expense

36,724



33,149



39,018


Income before income taxes

823



3,053



2,206


Income tax (benefit) expense

(423)



774



775


Net income

$

1,246



$

2,279



$

1,431


Income per share - basic

$

0.03



$

0.06



$

0.03


Income per share - diluted

$

0.03



$

0.06



$

0.03


NATIONAL BANK HOLDINGS CORPORATION





Consolidated Statements of Condition (Unaudited)





(Dollars in thousands, except share and per share data)






March 31, 2015


December 31, 2014


March 31, 2014

ASSETS






Cash and cash equivalents

$

490,104



$

256,979



$

197,815


Investment securities available-for-sale

1,413,414



1,479,214



1,720,840


Investment securities held-to-maturity

503,610



530,590



616,221


Non-marketable securities

27,050



27,045



31,109


Loans receivable, net

2,216,269



2,162,409



1,961,592


  Allowance for loan losses

(18,873)



(17,613)



(13,972)


Loans, net

2,197,396



2,144,796



1,947,620


Loans held for sale

4,935



5,146



2,143


FDIC indemnification asset, net

27,854



39,082



56,677


Other real estate owned

23,417



29,120



65,983


Premises and equipment, net

104,334



106,341



112,534


Goodwill

59,630



59,630



59,630


Intangible assets, net

15,546



16,883



20,893


Other assets

123,760



124,820



82,122


  Total assets

$

4,991,050



$

4,819,646



$

4,913,587


LIABILITIES AND SHAREHOLDERS' EQUITY






Liabilities:






Non-interest bearing demand deposits

$

758,763



$

732,580



$

689,248


Interest bearing demand deposits

390,523



386,121



398,429


Savings and money market

1,358,515



1,290,436



1,334,521


  Total transaction deposits

2,507,801



2,409,137



2,422,198


Time deposits

1,324,661



1,357,051



1,443,898


  Total deposits

3,832,462



3,766,188



3,866,096


Securities sold under agreements to repurchase

284,161



133,552



91,065


Federal Home Loan Bank advances

40,000



40,000



—


Other liabilities

71,751



85,331



60,577


  Total liabilities

4,228,374



4,025,071



4,017,738


Shareholders' equity:






Common stock

512



512



512


Additional paid in capital

993,874



993,212



990,700


Retained earnings

39,866



40,528



39,121


Treasury stock

(283,661)



(245,516)



(134,953)


Accumulated other comprehensive income, net of tax

12,085



5,839



469


  Total shareholders' equity

762,676



794,575



895,849


  Total liabilities and shareholders' equity

$

4,991,050



$

4,819,646



$

4,913,587


SHARE DATA






Average basic shares outstanding

38,028,506



39,439,646



44,819,644


Average diluted shares outstanding

38,028,612



39,444,330



44,863,138


Ending shares outstanding

36,797,787



38,884,953



44,486,467


Common book value per share

$

20.73



$

20.43



$

20.14


Tangible common book value per share (1)

$

18.86



$

18.63



$

18.44


Tangible common book value per share, excluding accumulated other comprehensive income(1)

$

18.53



$

18.48



$

18.43


CAPITAL RATIOS






Average equity to average assets

15.88

%


16.75

%


18.34

%

Tangible common equity to tangible assets (1)

14.10

%


15.25

%


16.96

%

Leverage ratio

13.96

%


14.98

%


16.81

%

(1)

Represents a non-GAAP financial measure. See non-GAAP reconciliation.

NATIONAL BANK HOLDINGS CORPORATION









Loan Portfolio Update















(Dollars in thousands)

































Accounting Treatment and Loss-Share Coverage Period End Loan Balances:


























March 31, 2015


December 31, 2014


March 31, 2014


ASC 310-
30 Loans


Non 310-
30 Loans


Total Loans


ASC 310-
30 Loans


Non 310-
30 Loans


Total Loans


ASC 310-
30 Loans


Non 310-30 Loans


Total Loans

Commercial

$

21,481



$

832,724



$

854,205



$

22,956



$

772,440



$

795,396



$

52,107



$

530,462



$

582,569


Agriculture

19,067



113,608



132,675



19,063



118,468



137,531



23,545



131,586



155,131


Commercial real estate

171,742



388,833



560,575



192,330



369,264



561,594



263,608



317,137



580,745


Residential real estate

33,158



602,904



636,062



40,761



591,939



632,700



60,467



548,758



609,225


Consumer

4,406



28,346



32,752



4,535



30,653



35,188



6,819



27,103



33,922


Total

$

249,854



$

1,966,415



$

2,216,269



$

279,645



$

1,882,764



$

2,162,409



$

406,546



$

1,555,046



$

1,961,592


Covered

$

142,345



$

29,542



$

171,887



$

160,876



$

32,821



$

193,697



$

244,322



$

43,268



$

287,590


Non-covered

107,509



1,936,873



2,044,382



118,769



1,849,943



1,968,712



162,224



1,511,778



1,674,002


Total

$

249,854



$

1,966,415



$

2,216,269



$

279,645



$

1,882,764



$

2,162,409



$

406,546



$

1,555,046



$

1,961,592






































Strategic/Non-Strategic Period-End Loan Balances:
































March 31, 2015


December 31, 2014


March 31, 2014


Strategic


Non-
strategic


Total


Strategic


Non-
strategic


Total


Strategic


Non-
strategic


Total

Commercial

$

826,190



$

28,015



$

854,205



$

765,114



$

30,282



$

795,396



$

513,669



$

68,900



$

582,569


Agriculture

130,711



1,964



132,675



135,559



1,972



137,531



151,708



3,423



155,131


Owner-occupied commercial real estate

151,463



18,258



169,721



140,729



19,228



159,957



134,453



26,935



161,388


Commercial real estate

279,768



111,086



390,854



275,311



126,326



401,637



227,634



191,723



419,357


Residential real estate

618,631



17,431



636,062



610,583



22,117



632,700



581,451



27,774



609,225


Consumer

30,974



1,778



32,752



33,371



1,817



35,188



31,401



2,521



33,922


Total

$

2,037,737



$

178,532



$

2,216,269



$

1,960,667



$

201,742



$

2,162,409



$

1,640,316



$

321,276



$

1,961,592






















Originations:





















First


Fourth


Third


Second


First


quarter


quarter


quarter


quarter


quarter


2015


2014


2014


2014


2014

Commercial

$

129,120



$

102,732



$

110,083



$

133,671



$

130,096


Agriculture

3,605



4,952



7,014



10,288



4,959


Owner-occupied commercial real estate

12,778



11,139



10,293



28,803



21,002


Commercial real estate

21,898



27,617



33,817



45,903



29,633


Residential real estate

33,042



31,680



35,404



44,539



27,812


Consumer

3,247



4,111



6,678



3,556



3,461


Total

$

203,690



$

182,231



$

203,289



$

266,760



$

216,963


NATIONAL BANK HOLDINGS CORPORATION

Summary of Net Interest Margin

(Dollars in thousands)




Three months ended

March 31, 2015


Three months ended

December 31, 2014


Three months ended

March 31, 2014



Average




Average


Average




Average


Average




Average



Balance


Interest


Rate


Balance


Interest


Rate


Balance


Interest


Rate

Interest earning assets:


















ASC 310-30 loans

$

266,573



$

12,694



19.05

%


$

295,308



$

14,195



19.23

%


$

424,335



$

16,900



15.93

%

Non 310-30 loans(1)(2)(3)(4)

1,917,774



19,682



4.16

%


1,879,779



20,897



4.41

%


1,480,674



16,506



4.52

%

Investment securities available-for-sale

1,449,654



6,897



1.90

%


1,529,101



7,273



1.90

%


1,779,739



8,647



1.94

%

Investment securities held-to-maturity

519,155



3,675



2.83

%


545,735



3,855



2.83

%


630,871



4,521



2.87

%

Other securities

27,101



327



4.83

%


26,997



302



4.47

%


31,658



389



4.92

%

Interest earning deposits and securities purchased under agreements to resell

329,637



207



0.25

%


118,171



78



0.26

%


130,355



81



0.25

%

Total interest earning assets(4)

$

4,509,894



$

43,482



3.91

%


$

4,395,091



$

46,600



4.21

%


$

4,477,632



$

47,044



4.26

%

Cash and due from banks

57,766







57,031







58,938






Other assets

365,996







391,582







386,388






Allowance for loan losses

(18,555)







(17,260)







(13,138)






Total assets

$

4,915,101







$

4,826,444







$

4,909,820






Interest bearing liabilities:


















Interest bearing demand, savings and money market deposits

$

1,718,010



$

1,071



0.25

%


$

1,677,494



$

1,075



0.25

%


$

1,716,638



$

1,057



0.25

%

Time deposits

1,339,897



2,328



0.70

%


1,375,779



2,420



0.70

%


1,464,120



2,449



0.68

%

Securities sold under agreements to repurchase

227,584



45



0.08

%


113,993



37



0.13

%


94,443



32



0.14

%

Federal Home Loan Bank advances

40,000



164



1.66

%


39,565



164



1.64

%


—



—



0.00

%

Total interest bearing liabilities

$

3,325,491



$

3,608



0.44

%


$

3,206,831



$

3,696



0.46

%


$

3,275,201



$

3,538



0.44

%

Demand deposits

733,230







728,345







667,009






Other liabilities

75,917







82,632







67,128






Total liabilities

4,134,638







4,017,808







4,009,338






Shareholders' equity

780,463







808,636







900,482






Total liabilities and shareholders' equity

$

4,915,101







$

4,826,444







$

4,909,820






Net interest income



$

39,874







$

42,904







$

43,506




Interest rate spread





3.47

%






3.75

%






3.82

%

Net interest earning assets

$

1,184,403







$

1,188,260







$

1,202,431






Net interest margin(4)





3.59

%






3.87

%






3.94

%

Ratio of average interest earning assets to average interest bearing liabilities

135.62

%






137.05

%






136.71

%
























(1)

Originated loans are net of deferred loan fees, less costs, which are included in interest income over the life of the loan.

(2)

Includes originated loans with average balances of $1.7 billion, $1.6 billion and $1.2 billion, and interest income of $16.2 million, $17.1 million and $12.0 million, with yields of 3.88%, 4.16% and 4.16% for the three months ended March 31 2015, December 31, 2014 and March 31, 2014, respectively.

(3)

Non 310-30 loans include loans held-for-sale. Average balances during the three months ended March 31, 2015, December 31, 2014 and March 31, 2014 were $2.9 million, $3.6 million and $2.3 million, and interest income was $77 thousand, $83 thousand and $45 thousand for the same periods, respectively.

(4)

Presented on a fully taxable equivalent basis using the statutory tax rate of 35%. The tax equivalent adjustments included above are $395 thousand, $320 thousand and $159 thousand for the three months ended March 31, 2015, December 31, 2014 and March 31, 2014, respectively.

NATIONAL BANK HOLDINGS CORPORATION









(Dollars in thousands)









Allowance For Loan Losses Analysis (1):
















As of and for the three months ended:


March 31, 2015


December 31, 2014


March 31, 2014


ASC 310-
30


Non 310-30


Total


ASC 310-
30


Non 310-30


Total


ASC 310-
30


Non 310-30


Total

Beginning allowance for loan losses

$

721



$

16,892



$

17,613



$

907



$

15,684



$

16,591



$

1,280



$

11,241



$

12,521


Net charge-offs

—



(193)



(193)



(1)



(242)



(243)



(2)



(316)



(318)


Provision (recoupment)/expense

50



1,403



1,453



(185)



1,450



1,265



(54)



1,823



1,769


Ending allowance for loan losses

$

771



$

18,102



$

18,873



$

721



$

16,892



$

17,613



$

1,224



$

12,748



$

13,972


Ratio of annualized net charge-offs to average total loans during the period, respectively

0.00

%


0.04

%


0.04

%


0.00

%


0.05

%


0.04

%


0.00

%


0.09

%


0.07

%

Ratio of allowance for loan losses to total loans outstanding at period end, respectively

0.31

%


0.92

%


0.85

%


0.26

%


0.90

%


0.81

%


0.30

%


0.82

%


0.71

%

Ratio of allowance for loan losses to total non-performing loans at period end, respectively

0.00

%


159.38

%


166.16

%


0.00

%


156.22

%


162.89

%


0.00

%


130.91

%


143.48

%

Total loans

$

249,854



$

1,966,415



$

2,216,269



$

279,645



$

1,882,764



$

2,162,409



$

406,546



$

1,555,046



$

1,961,592


Average total loans during the period

$

266,573



$

1,917,774



$

2,184,347



$

295,308



$

1,876,203



$

2,171,511



$

424,335



$

1,478,336



$

1,902,671


Total non-performing loans(2)

$

—



$

11,358



$

11,358



$

—



$

10,813



$

10,813



$

—



$

9,738



$

9,738






































Past Due Loans(1):



















March 31, 2015


December 31, 2014


March 31, 2014


ASC 310-
30 Loans


Non 310-
30 Loans


Total


ASC 310-
30 Loans


Non 310-
30 Loans


Total


ASC 310-
30 Loans


Non 310-
30 Loans


Total

Loans 30-89 days past due and still accruing interest

$

1,738



$

1,186



$

2,924



$

7,016



$

1,142



$

8,158



$

25,873



$

4,551



$

30,424


Loans 90 days past due and still accruing interest

24,797



174



24,971



33,834



263



34,097



47,789



53



47,842


Non-accrual loans

—



$

4,907



4,907



—



3,840



3,840



—



6,140



6,140


Restructured loans on non-accrual

—



6,451



6,451



—



6,973



6,973



—



3,598



3,598


Total past due and non-accrual loans

$

26,535



$

12,718



$

39,253



$

40,850



$

12,218



$

53,068



$

73,662



$

14,342



$

88,004


Total 90 days past due and still accruing interest and non-accrual loans to total loans, respectively

9.92

%


0.59

%


1.64

%


12.10

%


0.59

%


2.08

%


11.75

%


0.63

%


2.94

%

Total non-accrual loans to total loans, respectively

0.00

%


0.58

%


0.51

%


0.00

%


0.57

%


0.50

%


0.00

%


0.63

%


0.50

%

% of total past due and non-accrual loans that carry fair value marks

100.00

%


33.97

%


78.61

%


100.00

%


34.66

%


84.96

%


100.00

%


46.78

%


91.33

%

% of total past due and non-accrual loans that are covered by FDIC loss sharing agreements, respectively

85.59

%


9.95

%


61.08

%


87.41

%


11.39

%


69.91

%


79.13

%


15.67

%


68.79

%

NATIONAL BANK HOLDINGS CORPORATION













(Dollars in thousands)































Asset Quality Data (Covered/Non-covered)(1):














March 31, 2015


December 31, 2014


March 31, 2014


Non-covered


Covered


Total


Non-covered


Covered


Total


Non-covered


Covered


Total

Non-accrual loans

$

4,816



$

91



$

4,907



$

3,729



$

111



$

3,840



$

5,627



$

513



$

6,140


Restructured loans on non-accrual

5,388



1,063



6,451



5,767



1,206



6,973



1,936



1,662



3,598


Total non-performing loans(2)

10,204



1,154



11,358



9,496



1,317



10,813



7,563



2,175



9,738


OREO

7,529



15,888



23,417



10,653



18,467



29,120



29,418



36,565



65,983


Other repossessed assets

829



—



829



829



20



849



784



302



1,086


Total non-performing assets

$

18,562



$

17,042



$

35,604



$

20,978



$

19,804



$

40,782



$

37,765



$

39,042



$

76,807


Loans 90 days or more past due and still accruing interest

$

99



$

75



$

174



$

188



$

75



$

263



$

53



$

—



$

53


Accruing restructured loans(3)

$

6,817



$

1,846



$

8,663



$

9,489



$

9,786



$

19,275



$

17,800



$

4,720



$

22,520


Allowance for loan losses





$

18,873







$

17,613







$

13,972


Total non-performing loans to total non-covered, total covered, and total loans, respectively

0.50

%


0.67

%


0.51

%


0.48

%


0.68

%


0.50

%


0.45

%


0.76

%


0.50

%

Loans 90 days or more past due and still accruing interest to total non-covered loans, total covered loans, and total loans, respectively

0.00

%


0.04

%


0.01

%


0.01

%


0.04

%


0.01

%


0.00

%


0.00

%


0.00

%

Total non-performing assets to total assets





0.71

%






0.85

%






1.56

%

Allowance for loan losses to non-performing loans





166.16

%






162.89

%






143.48

%



















(1) Loans accounted for under ASC 310-30 may be considered performing, regardless of past due status, if the timing and expected cash flows on these loans can be reasonably estimated and if collection of the new carrying value is expected.

(2) Non-performing loans were redefined during the third quarter of 2014 to only include non-accrual loans and restructured loans on non-accrual. All previous periods have been restated.

(3) Includes restructured loans less than 90 days past due and still accruing interest.











Changes in Accretable Yield:













For the three months ended


Life-to-date




March 31, 2015


December 31, 2014


March 31, 2014


March 31, 2015

Accretable yield at beginning of period

$

113,463



$

113,108



$

130,624



$

—


Additions through acquisitions

—



—



—



214,994


Reclassification from non-accretable difference to accretable yield

11,186



16,858



6,164



245,122


Reclassification to non-accretable difference from accretable yield

(1,137)



(2,308)



(590)



(24,733)


Accretion

(12,694)



(14,195)



(16,900)



(324,565)


Accretable yield at end of period

$

110,818



$

113,463



$

119,298



$

110,818


NATIONAL BANK HOLDINGS CORPORATION



Key Ratios





As of and for the

three months ended



March 31, 2015


December 31, 2014


March 31, 2014

Key Ratios(1)






Return on average assets

0.10

%


0.19

%


0.12

%

Return on average tangible assets(2)

0.17

%


0.26

%


0.19

%

Adjusted return on average tangible assets(2)

0.60

%


0.71

%


0.65

%

Return on average equity

0.65

%


1.12

%


0.64

%

Return on average tangible common equity(2)

1.18

%


1.66

%


1.10

%

Interest earning assets to interest bearing liabilities (end of period)(3)

135.28

%


137.36

%


137.14

%

Loans to deposits ratio (end of period)

57.96

%


57.55

%


50.79

%

Non-interest bearing deposits to total deposits (end of period)

19.80

%


19.45

%


17.83

%

Net interest margin(4)

3.55

%


3.84

%


3.93

%

Net interest margin (fully taxable equivalent)(2)(4)

3.59

%


3.87

%


3.94

%

Interest rate spread(5)

3.47

%


3.75

%


3.82

%

Yield on earning assets(3)

3.87

%


4.18

%


4.25

%

Yield on earning assets (fully taxable equivalent)(2)(3)

3.91

%


4.21

%


4.26

%

Cost of interest bearing liabilities(3)

0.44

%


0.46

%


0.44

%

Cost of deposits

0.36

%


0.37

%


0.37

%

Non-interest expense to average assets

3.03

%


2.72

%


3.22

%

Efficiency ratio (fully taxable equivalent) (2)(6)

89.83

%


84.19

%


87.32

%

Adjusted efficiency ratio (fully taxable equivalent)(2)(6)

74.04

%


71.58

%


71.87

%

Asset Quality Data (7)(8)(9)






Non-performing loans to total loans

0.51

%


0.50

%


0.50

%

Covered non-performing loans to total non-performing loans

10.16

%


12.18

%


22.34

%

Non-performing assets to total assets

0.71

%


0.85

%


1.56

%

Covered non-performing assets to total non-performing assets

47.87

%


48.56

%


50.83

%

Allowance for loan losses to total loans

0.85

%


0.81

%


0.71

%

Allowance for loan losses to total non-covered loans

0.92

%


0.89

%


0.83

%

Allowance for loan losses to non-performing loans

166.16

%


162.89

%


143.48

%

Net charge-offs to average loans

0.04

%


0.04

%


0.07

%

(1)

Ratios are annualized.






(2)

Ratio represents non-GAAP financial measure.  See non-GAAP reconciliations.

(3)

Interest earning assets include assets that earn interest/accretion or dividends, except for the FDIC indemnification asset that may earn accretion but is not part of interest earning assets.  Any market value adjustments on investment securities are excluded from interest-earning assets.  Interest bearing liabilities include liabilities that must be paid interest.

(4)

Net interest margin represents net interest income, including accretion income on interest earning assets, as a percentage of average interest earning assets.

(5)

Interest rate spread represents the difference between the weighted average yield on interest earning assets and the weighted average cost of interest bearing liabilities.

(6)

The efficiency ratio represents non-interest expense, less intangible asset amortization, as a percentage of net interest income plus non-interest income on a fully taxable equivalent basis.

(7)

Non-performing loans consist of non-accruing loans and restructured loans on non-accrual, but exclude any loans accounted for under ASC 310-30 in which the pool is still performing.  These ratios may, therefore, not be comparable to similar ratios of our peers.

(8)

Non-performing assets include non-performing loans, other real estate owned and other repossessed assets.

(9)

Total loans are net of unearned discounts and fees.

NATIONAL BANK HOLDINGS CORPORATION



Non-GAAP Financial Measures and Reconciliations







(Dollars in thousands, except share and per share data)










Statements of Financial Condition












March 31, 2015


December 31, 2014


March 31, 2014

Total shareholders' equity


$

762,676



$

794,575



$

895,849


Less: goodwill and intangible assets, net


(75,176)



(76,513)



(80,523)


Add: deferred tax liability related to goodwill


6,609



6,222



5,059


Tangible common equity (non-GAAP)


$

694,109



$

724,284



$

820,385









Total assets


$

4,991,050



$

4,819,646



$

4,913,587


Less: goodwill and intangible assets, net


(75,176)



(76,513)



(80,523)


Add: deferred tax liability related to goodwill


6,609



6,222



5,059


Tangible assets (non-GAAP)


$

4,922,483



$

4,749,355



$

4,838,123









Tangible common equity to tangible assets calculations:







Total shareholders' equity to total assets


15.28

%


16.49

%


18.23

%

Less: impact of goodwill and intangible assets, net


(1.18%)



(1.24%)



(1.27%)


Tangible common equity to tangible assets (non-GAAP)


14.10

%


15.25

%


16.96

%








Common book value per share calculations:







Total shareholders' equity


$

762,676



$

794,575



$

895,849


Divided by: ending shares outstanding


36,797,787



38,884,953



44,486,467


Common book value per share


$

20.73



$

20.43



$

20.14









Tangible common book value per share calculations:







Tangible common equity (non-GAAP)


$

694,109



$

724,284



$

820,385


Divided by: ending shares outstanding


36,797,787



38,884,953



44,486,467


Tangible common book value per share (non-GAAP)


$

18.86



$

18.63



$

18.44









Tangible common book value per share, excluding accumulated other comprehensive income calculations:







Tangible common equity (non-GAAP)


$

694,109



$

724,284



$

820,385


Less: accumulated other comprehensive income, net of tax


(12,085)



(5,839)



(469)


Tangible common book value, excluding accumulated other comprehensive income, net of tax (non-GAAP)


682,024



718,445



819,916


Divided by: ending shares outstanding


36,797,787



38,884,953



44,486,467


Tangible common book value per share, excluding accumulated other comprehensive income, net of tax (non-GAAP)


$

18.53



$

18.48



$

18.43


Return on Average Tangible Assets and Return on Average Tangible Equity



 As of and for the

 three months ended


March 31, 2015


December 31, 2014


March 31, 2014

Net income

$

1,246



$

2,279



$

1,431


Add: impact of core deposit intangible amortization expense, after tax

815



815



808


Net income adjusted for impact of core deposit intangible amortization expense, after tax

$

2,061



$

3,094



$

2,239








Average assets

$

4,915,101



$

4,826,444



$

4,909,820


Less: average goodwill and intangible assets, net of deferred tax asset related to goodwill

69,379



71,080



76,271


Average tangible assets (non-GAAP)

$

4,845,722



$

4,755,364



$

4,833,549








Average shareholder's equity

$

780,463



$

808,636



$

900,482


Less: average goodwill and intangible assets, net of deferred tax asset related to goodwill

69,379



71,080



76,271


Average tangible common equity (non-GAAP)

$

711,084



$

737,556



$

824,211








Return on average assets

0.10

%


0.19

%


0.12

%

Return on average tangible assets (non-GAAP)

0.17

%


0.26

%


0.19

%

Return on average equity

0.65

%


1.12

%


0.64

%

Return on average tangible common equity (non-GAAP)

1.18

%


1.66

%


1.10

%

























Fully Taxable Equivalent Yield on Earning Assets and Net Interest Margin



 As of and for the
 three months ended


March 31, 2015


December 31, 2014


March 31, 2014

Interest income

$

43,087



$

46,280



$

46,885


Add: impact of taxable equivalent adjustment

395



320



159


Interest income, fully taxable equivalent (non-GAAP)

$

43,482



$

46,600



$

47,044








Net interest income

$

39,479



$

42,584



$

43,347


Add: impact of taxable equivalent adjustment

395



320



159


Net interest income, fully taxable equivalent (non-GAAP)

$

39,874



$

42,904



$

43,506








Average earning assets

4,509,894



4,395,091



4,477,632


Yield on earning assets

3.87

%


4.18

%


4.25

%

Yield on earning assets,fully taxable equivalent (non-GAAP)

3.91

%


4.21

%


4.26

%

Net interest margin

3.55

%


3.84

%


3.93

%

Net interest margin, fully taxable equivalent (non-GAAP)

3.59

%


3.87

%


3.94

%

Adjusted Efficiency Ratio


 As of and for the
 three months ended


March 31, 2015


December 31, 2014


March 31, 2014

Net interest income

$

39,479



$

42,584



$

43,347


Add: impact of taxable equivalent adjustment

395



320



159


Net interest income, fully taxable equivalent (non-GAAP)

$

39,874



$

42,904



$

43,506








Non-interest income

$

(479)



$

(5,117)



$

(354)


Add: FDIC indemnification asset amortization

7,670



7,922



7,608


Add: FDIC loss sharing expense

810



6,313



957


Less: gain on sale of previously charged-off acquired loans

(58)



(62)



(296)


Less: impact of OREO related write-ups and other income

(500)



(1,030)



(968)


Adjusted non-interest income (non-GAAP)

$

7,443



$

8,026



$

6,947








Non-interest expense adjusted for core deposit intangible asset amortization

$

35,388



$

31,813



$

37,682


Less: impact of change in fair value of warrant liabilities

390



219



898


Less: other real estate owned expenses

418



8,979



(1,633)


Less: problem loan expenses

(799)



(448)



(685)


Less: contract termination expenses

—



(4,110)



—


Less: conversion related expenses

(364)



—



—


Adjusted non-interest expense (non-GAAP)

$

35,033



$

36,453



$

36,262








Efficiency ratio

90.74

%


84.91

%


87.65

%

Efficiency ratio (fully taxable equivalent) (non-GAAP)

89.83

%


84.19

%


87.32

%

Adjusted efficiency ratio (fully taxable equivalent) (non-GAAP)

74.04

%


71.57

%


71.87

%

Adjusted Financial Results







For the three months ended


March 31, 2015


December 31, 2014


March 31, 2014

Adjustments to diluted earnings per share:






Income per share - diluted

$

0.03



$

0.06



$

0.03


Adjustments to diluted earnings per share (non-GAAP)(1)

0.14



0.13



0.12


Adjusted diluted earnings per share (non-GAAP)(1)

$

0.17



$

0.19



$

0.15


Adjustments to return on average tangible assets:






Annualized adjustments to net income (non-GAAP)(1)

$

20,716



$

21,384



$

22,196


Divided by: average tangible assets (non-GAAP)

4,845,722



4,755,364



4,833,549


Adjustments to return on average tangible assets (non-GAAP)

0.43

%


0.45

%


0.46

%

Return on average tangible assets (non-GAAP)

0.17

%


0.26

%


0.19

%

Adjusted return on average tangible assets (non-GAAP)

0.60

%


0.71

%


0.65

%

Adjustments to net income:






Net income

$

1,246



$

2,279



$

1,431


Adjustments to net income (non-GAAP)(1)

5,108



5,390



5,473


Adjusted net income (non-GAAP)

$

6,354



$

7,669



$

6,904


(1) Adjustments






Non-interest income adjustments:






  Plus: FDIC indemnification asset amortization

$

7,670



$

7,922



$

7,608


  Plus: other FDIC loss sharing income (loss)

810



6,313



957


  Less: gain on recoveries of previously charged-off acquired loans

(58)



(62)



(296)


  Less: OREO related write-ups and other income

(500)



(1,030)



(968)


Total non-interest income adjustments (non-GAAP)

$

7,922



$

13,143



$

7,301


Non-interest expense adjustments:






  Less: other real estate owned expenses

$

418



$

8,979



$

(1,633)


  Less: problem loan expenses

(799)



(448)



(685)


  Plus: warrant change

390



219



898


  Less: contract termination expenses

—



(4,110)



—


  Less: conversion related expenses

(364)



—



—


Total non-interest expense adjustments (non-GAAP)

$

(355)



$

4,640



$

(1,420)


Pre-tax adjustments

8,277



8,503



8,721


Collective tax expense impact

(3,169)



(3,113)



(3,248)


Adjustments to net income (non-GAAP)

$

5,108



$

5,390



$

5,473


Logo - http://photos.prnewswire.com/prnh/20141002/149998

SOURCE National Bank Holdings Corporation

Related Links

http://www.nationalbankholdings.com

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